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OnePath sale will increase group life competition
The group insurance space is expected to become even more competitive following today’s announcement that ANZ is selling its OnePath insurance business to Zurich Financial Services.
It will represent the second time in less than three years that a major bank-owned insurance business has been sold to an insurance company, following on from the National Australia Bank’s sale of 80 per cent of MLC Life to Japanese insurer, Nippon Life.
Coincidentally, MLC Life last month confirmed that it had picked up an industry fund mandate – that of Vision Super – something which the firm found difficult to achieve when it was perceived as being owned by one of the big four banks.
The OnePath/Zurich transaction also follows on from the Commonwealth Bank’s decision to sell CommInsure to AIA.
Taken together, the MLC Life, Onepath and CommInsure sales means that all the major players in the group life space are not substantially bank-owned and that each of them can call on the resources of a global insurance company parent. While Westpac continues to hold its life insurance business, it is not a major player in the group space.
When ANZ first announced that its life insurance business was on the block, industry speculation suggested it would be acquired by either Zurich or MetLife. ANZ’s decision to go with Zurich means that MetLife must continue to search for other means of gaining scale in Australia.
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The $135 billion fund has transitioned away from TAL Life Insurance following an “extensive tender process”.
The $80 billion fund is facing legal action over allegedly signing up new members to income protection insurance by default without active member consent.
In a Senate submission, the Financial Services Council has once again called for further clarification that the government will assess the consumer outcomes of group insurance against the enshrined objective of superannuation.
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